Lac-Mégantic victims should be compensated quickly, judge says

Reconstruction efforts in downtown in Lac-Mégantic.

Photograph by: Marie-France Coallier

SHERBROOKE — Compensating victims of the Lac-Mégantic rail disaster is not as complicated as it may seem, a Superior Court Justice told a group of lawyers during a bankruptcy protection hearing Tuesday.

Justice Gaétan Dumas encouraged the lawyers representing the rail company, the company’s insurance firm, the Quebec government and the court-appointed monitor to use their imaginations and get the file settled quickly.

“It’s rare that somebody claims responsibility so early in the process,” Dumas said, referring to Montreal, Maine & Atlantic railway, whose board chairman blamed the train’s engineer soon after the July 6 derailment and fire that destroyed Lac-Mégantic’s downtown.

“When the debtor says: ‘I’m responsible’ and claimants say: ‘I have a right to compensation,’ all that’s left is to pay them.”

The rail company, whose debts exceed its assets, filed for creditor protection in August, allowing it to avoid bankruptcy and reorganize its financial affairs. On Tuesday, the court extended the protection to the next court hearing on Oct. 9.

Right now, the goal is to sell off MMA’s assets — about $17.9 million, mostly in buildings, land and track structure.

“That sounds easy enough, but the assets of the U.S. debtor will be sold under the supervision of the U.S. bankruptcy court, the assets of the Canadian debtor will be sold under the supervision of the Canadian court ... and establishing the process requires a little bit of time, but we’re getting there,” said lawyer Sylvain Vauclair, who is representing Richter, the monitor appointed to oversee the process. “Then we’re thinking about how we’re going to administer the claims.

“What we need to plan for is how many claims there will be as a result of the tragedy.”

Vauclair said that the process will be completed in about one year to 16 months — a period “vastly shorter” than a class-action suit.

The number of claims could be in the thousands, when all the people affected by the derailment are considered. Forty-seven people died but many more were removed from their homes, lost businesses and other belongings. MMA had only $25 million in liability insurance and the victims will all get a share of that, Vauclair said.

The downtown core where Lac Mégantic’s 6,000 inhabitants spent many hours of their days is now a fenced-off flattened construction zone as workers try to remove thousands of litres of crude oil that spilled from dozens of train cars after the unmanned, runaway train jumped the tracks and exploded. Cleanup is expected to cost at least $700 million.

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